Anxiety disorders such as generalized anxiety disorder (GAD) and post-traumatic stress disorder (PTSD) are characterized by heightened fear reactivity to ambiguous threats. This over generalization of fear may arise from erroneous assessment of cue-associated contingency or failure to distinguish a safe environment from a previously experienced aversive one, which then results in inappropriate retrieval of aversive memories and activation of fear circuits. Since pattern separation in dentate gyrus (DG)-CA3 circuit is thought to minimize interference between similar inputs, it may serve as neural mechanism by which ambiguous threats are processed. The DG is host to ongoing neurogenesis throughout life in both rodents and humans and adult- born neurons have been implicated in pattern separation, suggesting a potential role for these cells in processing of ambiguous threats. However, the local circuit mechanisms and neural pathways by which adult- born neurons process ambiguous threats are poorly understood. Addressing this gap in our knowledge may generate fundamental insights into the neurobiology of fear generalization and fuel strategies to reengineer the DG-CA3 circuit to improve ambiguous threat processing. Here, we will use a multidisciplinary approach involving retro-and lenti-viral gene transduction, optogenetic based neural pathway manipulations, and behavioral analysis to interrogate the causal links between adult-born neuron dependent regulation of feed forward excitation-inhibition balance and DG-CA3 extrinsic circuitry with modulation of fear responses to ambiguous threats. In proof of concept studies, we propose to genetically reengineer excitation-inhibition balance in the DG-CA3 circuit to enhance processing of ambiguous threats and develop a hypothesis driven drug discovery approach to identify small molecule modulators of excitation-inhibition balance and consequently, fear generalization. Together, these studies will generate a scaffold for how adult-born dentate granule neurons dictate fear generalization and demonstrate how modulation of excitation-inhibition balance may be harnessed for treatment of fear generalization in anxiety disorders.